Elon Musk says he won’t buy Twitter. Can he just walk away? Twitter is suing; GOP loses ‘free speech’ savior
Billionaire Elon Musk called off his deal to buy social media company Twitter, according to a filing on Friday with the Securities and Exchange Commission.
Skadden Arps attorney Mike Ringler said in a letter to Twitter's chief legal officer that “Twitter has not complied with its contractual obligations."
For nearly two months, the company has failed to provide Musk with information about fake or spam accounts, the letter said.
The news sent Twitter stock tumbling 5% in after-hours trading. The stock has fallen sharply since the Twitter board accepted Musk's offer to buy the company in April for $54.20 a share.
On the day of the announcement, Twitter closed at $51.70 a share. On Friday, it closed at $36.81.
The Tesla and SpaceX CEO is as known for his polarizing online persona as his entrepreneurial endeavors.
He is popular on Twitter, where he has more than 100 million followers, and frequently chimes in on politics, talks business openly, and embraces the internet’s meme culture. Some of his tweets have landed him in legal trouble.
According to the filing with the SEC on April 25, the deal calls for Musk to pay Twitter a $1 billion break-up fee if he terminates the deal.
But Musk may not be able to just walk away. Twitter may be able to force Musk to complete the deal, legal observers say.
At issue is whether the prevalence of bots on the social media platform is “fundamental to Twitter’s business and financial performance” as Musk's lawyers have argued.
"The question is whether or not this is really material information," UCLA law professor James Park said. "It should be fairly obvious that there's potentially fake spam accounts at a company like Twitter."